It's hard to get excited by yet another headline about yet another record high for oil prices (although this week's run from $126 to above $135 is quite spectacular), but it is going to become increasingly hard to avoid energy headlines in general, as the topic finally becomes, as some of us have predicted for a while, the defining one of our epoch.

We saw yesterday that The markets and the business press are waking up to peak oil, but an even stronger sign is coming today from the International Energy Agency, the watchdog organisation set up by Western countries in the 70s in the wake of the first oil shock. We've long criticized the IEA for its happy bullish forecasts for future oil production, but have noted over the past 2 years signs that they were increasingly uncomfortable with their scenarios (and the 'don't rock the boat' politics they encourage), and they now seem willing to take the plunge on the 'shrill' side, something which is likely to have a huge political impact worldwide:

The world's premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand.

The Paris-based International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world's top 400 oil fields. Its findings won't be released until November, but the bottom line is already clear: Future crude supplies could be far tighter than previously thought.

This matters hugely, because the IEA numbers are widely used by specialists, politicians, consultants, and the whole ecology of pundits that write about energy. Their sanguine scenarios were used as the backdrop for most discussions of energy into the future, and they provided a reassuring "business as usual" outlook.

For several years, the IEA has predicted that supplies of crude and other liquid fuels will arc gently upward to keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently. Now, the agency is worried that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day over the next two decades.

The decision to rigorously survey supply -- instead of just demand, as in the past -- reflects an increasing fear within the agency and elsewhere that oil-producing regions aren't on track to meet future needs.

The 100mb/d limit has already been aired publicly by the CEOs of Total or ConocoPhillips, but this has not really seeped into public consciousness. Having it underlined by the most authoritative public entity on the subject will have an altogether different impact which nobody will be able to ignore.

The sentence above in the article is also worth flagging: the change is that the IEA will look at production rather than at demand; in other words, they have finally bowed to reality and decided to behave as physicists (look at facts: resources decide) rather than as marginalist economists (follow the ideology: prices decide) in looking at how markets can balance. The significance of that cannot be overstated either.

So don't expect energy to stay out of the headlines in the coming months and years - in fact, it will seep into all areas: economics, politics to take its rightful place after too many years of neglect and waste.